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Plan of the Improvement of China’s Private Companies’ Incentive System - A Case Study on Suning Group’s Customer Service Department

Executive Summary

If the employees are highly satisfied and motivated, then they automatically deliver a variety of benefits to the company. It is to acknowledge that with the help of employee satisfaction and motivation, the level of employee retention could become positive within the organization. The incentive could be treated as that extra amount that the company shares with its employees against their performance. The major rule of the incentive system is that it should be designed in such a way that the company never feels overburdened. It is to ascertain that incentive system can actually increase the cost for the company if not designed in an appropriate way. This work is an attempt to analyse the incentive system of Suning Company.

Interpretive research has been applied to the study and it adopts the thought of empirical research to study raised questions. Here, total concentration has been paid to the inductive approach so that the effective incentive plan could be identified for the Suning organization. As with the help of inductive research approach, it becomes easier to observe the suitable internal working environment with context to the incentive plan. The nature of the study is quantitative, where the researcher has the objective information. Data has been collected from primary as well as secondary sources. In order to analysis the information, SPSS and regression analysis has been conducted within the study.

It has been concluded that variables such as wage income, cultural atmosphere, job content, wage increase, job challenge, bonus, praise and commend and interpersonal relationship play a significant role in determining the satisfaction level of the employees. It means all the employees cannot be motivated by only monetary benefits, and so, for an incentive system to be effective, it must include non-monetary benefits as well. Thus, the results align with the Maslow's Need Hierarchy Theory, which states that all the individuals cannot be motivated by the same force: different people have different needs. Therefore, it is essential for Suning Company to design its incentive system in such a manner that incorporates both monetary and non monetary components.

Chapter 1: Introduction

1.1 Background

An organization has a variety of elements that provide them opportunities to improve their internal working environment and most importantly establishing their name as an employee centric company. The actual aim of every organization is to work for the stakeholders. Employees are significant stakeholders who are required to deal in a proper and effective way. Their satisfaction and motivation must be the priority of the companies (Festing and Engle, 2008). If the employees are highly satisfied and motivated, then they automatically deliver a variety of benefits to the company. It is to acknowledge that with the help of employee satisfaction and motivation, the level of employee retention could become positive within the organization. Thus, it becomes clear that the practices and working environment of an organization have power and immense role in achieving the human resources objectives (Ealias and George, 2012). The incentive system could be define as a system which is related to distribution of extra benefits or perks to employees irrespective of their efforts to ensure the groth of company. it could be provided into monetary as well as non monetary sources.

For the same purpose, the organization can rely on a range of activities and management practices, where one of them is incentives. The incentive could be treated as that extra amount that company shares with its employees against their performance. Furthermore, the incentive system is the best way to build a positive relationship with employees. Moreover, having a positive and excellent incentive system is a way to deliver appreciation to the employees with exceptional performance. Above stated are some of the foremost advantages of the incentive system that could be availed by the organization. The major rule of incentive system is that it should be designed in such a way that the company never feels overburdened. It is to ascertain that incentive system can actually increase the cost for the company if not designed in an appropriate way (Haley, Haley and Tan, 2012). Thus, maintenance of cost is also required while planning the ideal incentive system in private companies.

The management experts have given an adequate amount of consideration to the incentive system. They corroborate and support the requirement of incentive system within the organization. According to them, it is required as it enables the organization to create a positive working environment, and the company could get an opportunity to share their wealth with the hard working employees, as well as, affecting the mindset of individuals and setting its positive impact at their psychological level. Previously, the motivational theories and models have also suggested the same results and viewpoints for the incentive system. According to Herzberg theory, the company should provide proper remuneration that must include an incentive system. Hence, the incentive system has been supported by the management experts (Hessels, Thurik and Aguado, 2013). Due to immense competition amongst private companies, the incentive system has become popular and it has now become a trend in most of the business entities.

There are various ways through which incentive system could be provided. The company can fix a particular amount after the particular level of sales has been achieved, or the incentive could be provided in any other ways as well. The ideal incentive system always justifies with the actual efforts made by employees for the growth and development of the organization. Earlier, the incentive system was just used to attract the employees and encourage them to continue their excellent performance. However, now in the era of a stressed working environment, the incentives have become their rights and opportunity to ensure their financial stability (Jian, Wei and Deci, 2012). The companies working at a global level are dedicated to provide incentives to their employees as they understand its values. Furthermore, in today’s business environment, providing proper incentive to employees has become an ethically driven business practice. There are certain problems that could be faced by the companies in order to formulate ideal and beneficial incentive plan for the companies. The assessment of the performance of employees is one of the major factors that could be treated as a challenge to the incentive system (Mathieu and et. al., 2014). The construction of the incentive system could face challenge that is related to the manipulation within the performance system as well. It could give birth to the corruption and unethical activities as well if the managers are not fulfilling their responsibilities. Thus, the principles of the incentive system suggest that the role of each and every individual is immense in making the incentive system effective and efficient (Richard and Johnson, 2001).

Here in this report, special priority has been given to understand the expediency and various dimensions of the incentive system. Total consideration has been given to plan the best incentive system that should fulfil the need and expectations of employees. The study has taken place in the Chinese market where private companies are growing very rapidly. The customerservice department of the Suning’s group has been taken as an example for the study.

1.2 Aims and objectives of the company

According to the incentive theory, the higher the incentive level, the more effort the management will make, and the better the work performance, the higher the level of employee satisfaction. Therefore, employees’ satisfaction can be improved, and the issue of talents introduction and management can be solved only by designing and perfecting the incentive mechanism on the basis of fully knowing the needs and thoughts of employees. The aim of this research is to find some problems existing in the current incentive mechanism of talents in Suning’s customer service department through empirical analysis and to formulate a plan to enhance satisfaction and performance based on these factors.

Objectives:

To identify the significance of the incentive system in general

To assess the ideal incentive system for a company

To understand the effectiveness of Suning’s incentive system

To recommend various ways to improve the incentive system of Suning

1.3 Research questions:

What is the significance of incentive system?

What is the ideal incentive system?

How effective is the Suning’s incentive plan?

What are the various ways to improve the planning process of the incentive system within China’s private company?

1.4 Significance of the Study:

The major importance of this study is that it should deliver positive results in respect to improving the incentive related practices of companies. Through this report, the ideal incentive system could be identified in relation to the Chinese market. Furthermore, the intricacies that could be faced in deciding the incentive for the customer service department could also be resolved. Thus, in this way the study should be beneficial from various perspectives.

1.5: Structure of the report

This essay is an example of a student's work

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This essay has been submitted to us by a student in order to help you with your studies. This is not an example of the work written by our professional essay writers.

Chapter 1: Introduction: It is the foremost section that comes in the beginning of the report. The main aim of including this section is to create an overview of the study and various terminologies. Here in the current report,a brief explanation of incentive system has also been provided. Furthermore, the research questions and objectives are other crucial elements of this introductory section. With the help of this chapter, the purpose for conducting the study could be identified through mentioning the research questions.

Chapter 2: Literature Review: The literature review is a chapter in which a researcher reviews previous literature that is related to the current content. This section is also conducted to understand the various dimensions of incentive system. The major significance of the literature review section is that the knowledge about the chapter could be developed at colossal scale.

Chapter 3: Research Methodology: The major role of this chapter is to give a logical base to the entire research process. The research report is also based on certain logical interpretations and scientific fundamentals. All these principles that are related to research tools and techniques could be applied within this chapter. Within the current report, the most useful and appropriate research trajectories are selected and reviewed for the purpose of the study.

Chapter 4: Data Analysis: This section plays a very significant role in the entire research process. The focal aim of the investigation is to provide outcomes to the society so that the changes could be made accordingly. Thus, statistical tools will be applied within data analysis so that the collected data could be analyzed properly.

Chapter 5: Conclusion and Recommendations: The last section of the report is conclusion and recommendations, where the major outcomes of the study are concluded and the achievement of research objectives are stated. The section of recommendations suggests the solutions to deal with identified problems. All these sections mentioned above have been conducted into the current report in a contensious manner.

Chapter 2: Literature Review

2.1 Introduction

In order to conduct any research investigation efficiently and effectively, a critical role is played by that of the literature review section. Its importance for any scholarly work can be understood through the substantial contributions it makes in developing and enhancing knowledge of not only the researcher but the reader(s) as well (Laffont and Martimort, 2009). A section of the literature review can be defined as an evaluative report of information found in different literatures such as books, journals, articles. related to the subject area of the research. Another aspect that makes the literature review section all the more important for any investigation is that it helps in assessing previous literatures about the topic and assess it on various parameters so that the gaps (if any) in current and past research studies can be identified. This way the effectiveness of present study can be enhanced significantly.

The literature review section of the present study sheds light on different aspects associated with the subject matter of incentives. It evaluates the very meaning of incentives and compares views provided by different experts and authors on the topic by assessing their works done in the field. Additionally, this section of literature review also assesses necessity of incentive systems, i.e. their significance to business organizations. Moreover, it also discusses about an ideal or the most appropriate incentive system for companies, regardless of the market that they may be operating in.

2.2 Meaning of incentive systems

One of the most important aspects of working within an organization is related to the concept of ‘incentives’ (Mason and Watts, 2010). This facet has especially gained a lot of importance in recent years, as the aspect of human resources management and keeping employees happy and satisfied has emerged to become very popular. In the view of Heinrich and Marschke (2010), incentives can generically be defined as something that motivates an individual to perform some specific set of actions, so that they can complete different functions and duties and contribute towards the attainment of some specific goals and targets. According to Johnson and Hoyo (2012), human resources is one of the most important and vital assets that business organizations can obtain, because of which they need to give precedence to taking steps to satisfy them to the greatest extent possible (Lam, 2014). For this, incentives have a very crucial role to play. Pedroni and et. al (2009), supports this by stating that companies must pay good amount of money in terms of incentives to its employees, so as to motivate them and extract the best performance from them, while making them loyal and committed to the workplace. This essentially means that if an organization aims at sustaining its market position for extended time periods and also fulfill its corporate goals and objectives comfortably, then incentive systems can turn out to be crucial (Mason and Watts, 2010). It is an aspect on which success or failure of an enterprise depends on. In many past related studies, it has been observed that the best way to motivate employees is through monetary terms, thus by giving them incentives on basis of their performance in the workplace can be very useful to the company. Costrell and Podgursky (2009) believe that for thehuman resources department of an organization to be successful and effective, it must then develop different incentive systems in order to address their skills and attributes. Incentive systems, in this context, can be considered as a way of acknowledging efforts made by employees in order to fulfil organizational goals and objectives (Ballwieser and et. al, 2012). If an organization is not able to develop and implement a proper and effective incentive system, then it may not be able to sustain in the market for a long period of time. Furthermore, incentive systems can also be defined as an approach on the basis of which the performance of employees can be assessed and measured thoroughly.

In this context, Laffont and Martimort (2009) recalls that it is through different incentive systems that HR department can motivate the employees to give their best performance for the company, so that organizational goals can be accomplished with ease and comfort (Karsenty and Ongolo, 2012). However, in contrast to it, Ballwieser and et. al (2012) states that incentive systems are not a critical part of operations of an enterprise, largely because it not a necessary element and firms can function easily and effectively even without developing an incentive system. The authors believe that although incentives can prove to be very effective in terms of motivating employees and obtaining their loyalty and commitment towards the company. On the other hand, Weingast (2009) contradicts this by stating that this phenomenon is only applicable in situations where a concerned employee is working at a higher position than that of normal employees; such as at a managerial level or top management level. In this sense, it may not be wrong to say that incentive systems may not necessarily be in monetary terms but they can also be in non-financial aspects as well (Bau and Dowling, 2007). Due to this reason, Mason and Watts (2010) stated in his research that companies need to develop an incentive system, so that identification can be made to those employees who can be motivated by financial benefits; and those who will be satisfied through other non-monetary incentives like promotions. Furthermore, Glenton and et. al (2010) views incentive systems as a tool for measuring the performance of employees and motivating them to give their best performance for the company. Therefore, it can be said that incentive systems are essentially a way through which employee performance can be enhanced and motivated, thus extending the length of existence of firm in the target market (Costrell and Podgursky, 2009).

2.3 Need and necessity of incentive systems

Incentives are a critical form of business operations, as they in essence have a significant influence over operations as well as the existence of an organization in the market (Johnson and Hoyo, 2012). Over the years,the significance of incentive system has grown by great margins, due to which it is becoming necessary for companies, regardless of which market they may be a part of, to pay attention towards it and use it in the daily functioning of the enterprise. According to McNeely (2009), the success of organizations is dependent upon the motivation level of employees and the best way to motivate them is by giving them incentives. Therefore, it can be said that most effective method of motivating employees is through incentives. Bau and Dowling (2007) determined it as the best method of encouraging workforce and making them loyal towards the company (Magnusson and Nyrenius, 2011). This means that incentive systems are important from the perspective that they help in motivating the employees to give their best performance and contribute significantly towards corporate goals and objectives. Incentive programs motivate employees to push and challenge themselves to achieve higher degrees of productivity. This ultimately translates into increased earnings for your company. When an incentive plan is put in place, it will convey a message to the staff that the better their performance is in a given period of time, the more incentives they will get (Park and Leydesdorff, 2010), and this way they can attain their personal and professional objectives. Milne (2007) states that by providing incentives to the employees, will encourage them to put in more time and efforts to complete tasks and duties assigned to them, for the reason that they would be provided incentives only on the basis of performance they give in the company.

Clark and Wilson (2008) opine that another way to view the significance of incentive systems can be seen through the fact that it promotes team working at the workplace. It is a well known fact that teamwork is crucial for the success of an organization, largely due to the reason that employees are required to work in different groups and collaboratively with others (Pedroni and et. al, 2009). By using different types of the incentive program, management can motivate the employees to work with others in teams and make their contribution in a team based setting towards company’s goals and objectives. In this regard, Holtmann (2002) believes that by tying incentives to group performance can significantly help in fostering team working within the company (Blundell, Emmerson and Wakefield, 2006). This means that employees will have to rely on one another to make inputs to the task at hand, thus, creating a team based environment at the workplace. In many past studies and investigations on the topic, it has been observed that team working helps companies to perform effectively and also maintain its image in the market. Therefore, for any entity to sustain in a market, team working is very important (Mason and Watts, 2010). In addition to it, peer pressure may also enable an individual to work in teams. Through team working, the process of functioning in markets can be made a lot simpler and effective, as the company can attain more goals in the lesser amount of time.

Morale booster is another point that explains the importance of having an incentive system in place. Barnum, Kutzin and Saxenian (2010) found in a study that incentive plans have the capability of increasing morale of employees and enhance their level of job satisfaction in the workplace (Lam, 2014). For companies, it is important to take steps that may help in boosting the morale of employees so that they are more loyal and committed to the company and contribute to its goals and objectives. According to McNeely (2009), there is a direct and positive correlation between earning potential of an organization and that of their work efforts. If workplace morale is high, then employee turnover can be reduced dramatically, which then would have a significant impact on performance as well as the existence of firm in the market, plus its operations (Weingast, 2009). This way, the cost of hiring and training new employees can be reduced, which then will help the company to function in an effective manner and also realize its goals and targets.

Incentive programs are essential for companies;they have a significant influence over the aspect of service delivery to the organization (Glenton and et. al 2010) states in his study that if an organization aims at improving delivery of services as well as the quality of the goods that it provides, then employees have to be provided with appropriate incentives, as it is the most effective way through which an improvement can be made in this regard (Belloni and Alessie, 2009). Therefore, it may not be wrong to say that the quality of goods and/or services is largely dependent upon incentives that are being given to the employees. If they are high, then there are chances that improvements can be brought about in the stated aspect, but in otherwise situations it can prove to be very dangerous for the organization. Additionally in this regard, Heinrich and Marschke (2010)states that the existence of the company is dependent on the type of incentive program being implemented in the workplace. Furthermore, incentive systems are also imperative for companies, regardless of the market that the company may be operating in; it has to ensure that employees are well motivated and that they give their best performance for the company (Heinrich and Marschke, 2010). For the same reason, incentive initiatives can be very useful for the company. Moreover, Karsenty and Ongolo (2012) believe that incentive systems are a very effective source of retaining employees at the workplace; they have a very significant impact on the working capacity of the organization. This means that if an enterprise aims to increase its capacity, then providing incentives to employees can be very useful, as they can be retained much easily, and they can be made to give their best performance for the organization (Glenton and et. al, 2010).

2.4 An ideal incentive system

Companies, regardless of market that they may be operating in, it is imperative to develop an incentive plan and implement it at a workplace, as it will enable management of the organization to provide incentives to employees and motivate so that corporate goals can be realized (McNeely, 2009). Over the years, numerous incentive systems and approaches have been developed which provide companies with a basis on which they can give incentives to the employees. According to Park and Leydesdorff (2010), they can largely be classified into Individual Incentive (PBR) Schemes, Group Incentive Schemes or others. Organizations to need to monitor their business functions and compare them with such different incentive plans and then identify the one best suited for the firm. This will provide the organization with an opportunity to slay emphasis over significantly improving their business functions and prolonging the existence of the organization by great margins (Holtmann, 2002).

One such system on incentives is that of the Individual Incentive Scheme which consists of different plans such as Differential Piece Rate Plan; Halsey Premium Plan; Rowan Premium Plan; Emerson Efficiency Plan; Gantt Task and Bonus Plan. Out of these, the differential piece rate plan is the most relevant as well as effective scheme of incentives (Pekkanen, Nyblade and Krauss, 2006). It was developed by F. W. Taylor, father of scientific management, which is relevant in the modern day world and can be applied in most situations with great ease and comfort. In a study by Johnson and Hoyo (2012), it was found that using this incentive system can be very beneficial to business enterprises, largely because it focuses on the productivity of employees. In this system, the management of companies have to follow the concept of two piece work rates, where one is a higher wage rate for those employees who meet organizational standards, while the second one is for those workers who are not able to fulfill these benchmarks set by the management (Clark and Wilson, 2008). This way a clear distinction can be made among those employees who have contributed to organizational goals significantly and those who have not been able to do so. According to Lantz and et. al (2007), this clear demarcation among the staff can motivate those employees who fell short of the company’s standards of work to identify areas that their performance was hampered in and take steps to improve the same (Lantz and et. al, 2007). Though this approach can sometimes be very time consuming, it eventually would contribute substantially towards improving functioning of the organization as well as enhancing the performance of employees. In this regard, Clark and Wilson (2008) believes that if this incentive system is used correctly, then it can bring about positive results for the company on top of prolonging its very existence in the market,as well as make the task of achieving organizational goals and objectives a lot simpler and effective (Barnum, Kutzin and Saxenian, 2010).

However, on the other hand, Bau and Dowling (2007) argue that it is very difficult for many companies, especially the ones operating in the service industry to develop work standards and implement them into the workplace.This is due to the fact that after many times it becomes very difficult for corporations to use this incentive system. Sometimes, it can become very difficult for the enterprise to sustain and survive in the market for a longer period of time and fulfil its goals and objectives (Milne, 2007). Since there are no specific guidelines on which measures can be set to determine standards of work of the company, Funk (2010) recalls that it becomes very difficult for organizations to use this incentive system. Pekkanen, Nyblade and Krauss (2006) contrast it by saying that companies regardless of the industry they may be operating in can determine such standards easily. They support it by giving an example that in a service company such as a restaurant, such standards of work can be seen in terms of the time taken by the employee on a table. The faster the employee caters to demands of customers; the better his performance will be (Burgess and Ratto, 2003). Whereas on the other hand, in manufacturing companies, such work benchmarks can be in terms of a number of parts or machineries they manufacture in a given period of time. If the productivity of an employee is high in such terms, then it can be considered that their performance was also excellent and that they were able to fulfil the organizational standards. In this regard, the conduct of an employee must be measured and evaluated by keeping in mind various facets, such as raw materials available to them, equipments, and the time consumed in completing the job. Both Lam (2014) and Funk (2010) stated that an individuals’ performance must be assessed in a very holistic manner that takes into account all such factors and forces.

Another type of incentive systems is a group incentive scheme. In this method, an employee’s performance is evaluated by keeping in mind their work in a team. Ballwieser and et. al (2012) found that it can be a very effective method of motivating the employees to work in different groups and contribute towards organizational goals as a team. However, Laffont and Martimort (2009) contradict findings of Ballwieser and et. al. (2012) by stating that when in a team based setting, it becomes very difficult to monitor and assess performance of an individual, as there is no specific way through which conduct of one person can be evaluated. Due to this reason, management may have to face difficulties many times in providing incentives to employees on the basis of their performance in a team based setting (Ballwieser and et. al (2012).

There are various types of incentive systems within this scheme such as profit sharing, co-partnership and others. In a profit sharing company, the firm shares its profits with the employees in the form of incentives. It can be a very useful method, primarily because it would motivate the employees and also make them loyal towards the workplace (Johnson and Hoyo, 2012). In this regard, Park and Leydesdorff (2010) recall that when staff is given a share of profits, it motivates them extensively and thus increase their loyalty. Within which, they would give their best performance every time so that the company earns more profits, and their incentives would increase. Mason and Watts (2010) believe that if an organization distributes its profits earned over a time period, it may result in a decreased earning for the company. This may influence the flow of work within the firm, as it would have significantly less financial resources available which may consequently affect its ability to achieve its goals in the future (Mason and Watts, 2010). However, Dohmen and Falk (2010) state that sharing profits with employees can be the best way of motivating employees and making them loyal towards the workplace. Through this approach, staff can be encouraged to give their best performance and make significant contributions to increase the profits of the organization and thus make it more sustainable in the industry (Barnum, Kutzin and Saxenian, 2010).

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Founded in 1990, Suning is the leader in the Chinese retail industry and its commodities cover a wide range of categories including traditional household appliances, consumer electronics, general merchandise, daily necessities, books, virtual products, and many others (Ke and Sun, 2015). In July 2007, it was listed on Shenzhen Stock Exchangeand the company has been highly acknowledged by the investment market due to its outstanding performances. As a leading retailer, the management attaches great importance to the after-sales service department. At present, the department has more than 5000 professional service personnel, where they make great contributions to the successful operation of Suning’s businesses (Yu and Wang, 2014). Even so, compared with many other large-sized retailers such as multinational companies, such as Wal-Mart and Tesco, Suning’s after-sales service still has big room for improvement. Currently, many realistic problems exist in Suning’s customer service department, for example, the serious loss of talents and aggravation of the contradictions between grass-root employees and department managers. Therefore, it is an urgent matter and practical work to solve the Human Resources (HR) management problem of the customer service department.

2.5 Conclusion

Incentives form an essential part of the functioning of companies, irrespective of the market that they may be a part of. During this research for the literature review section of this thesis, topics such as meaning of incentive systems; different types of incentive schemes as well as need and necessity of incentives for an organization have been discussed. Throughout this research, it was observed that developing and executing an incentive system at the workplace is very important as it not only motivates the employees but also makes them loyal and committed to the workplace. Companies can also improve performance of employees considerably through a scheme of incentives on the basis of profit sharing.

Chapter 3: Research Methodology

3.1 Introduction

The major role of this chapter is to give a logical base to the entire research process. The research report is also based on certain logical interpretations and scientific fundamentals. All these principles related to research tools and techniques could be applied within this chapter. Within the current report, the most useful and appropriate research trajectories have been selected to help conduct the study.

3.2 Research Philosophy

The research philosophy indicates towards the mindset of a researcher towards the study or subject matter. Within the research philosophy, the researcher provides the dimensions of the knowledge related to the topic. There are two kinds of research philosophies which are highly significant in regards to conducting the study. One of which is positivism research philosophy, and another is interpretive research philosophy. In positivism research philosophy, the researcher focuses on the universal facts and figures that remain same all over the world in the same situation. There is no scope of change into the opinion and viewpoint of people under any circumstances (Pennink and Jonker, 2010). Ahead in the situation of gaining different viewpoints and opinions, the researcher can rely upon the interpretive research philosophy. It is highly significant to understand that the interpretive research philosophy provides a wide range of knowledge and intellect towards the subject matter as it caters various situations and possibilities available within the environment. Here the research philosophy that is highly significant with a view of conducting the current study is the mix research philosophy. The reason is that private companies work in a very dynamic environmentand there is a huge requirement to focus on assessing a better incentive plan that is actually based on various situations. The viewpoint of various people could definitely be assessed to contribute towards making the most effective incentive plan. Thus, the interpretive research has been applied to the study. The basic principle highly praised by positivism is the objectivity and universality of scientific conclusion, stressing on the point that knowledge must be built on empirical facts of observation and experiment to reveal true conclusions from observational data and experimental study (Bernard, 2012). This research will adopt the thought of empirical research to study raised questions.

3.3 Research Approach

The research approach suggests that the way or technique that has been adopted by the researcher to reach the conclusion or final phase of the study. The research approach indicates what kind of information the researcher has earlier developed for the study. There are two kinds of research approaches that could be applied by the researcher within the study: Inductive and deductive. The inductive approach is the one in which researcher observe the situation first and then arrive at a conclusion at the end. It is one of the major factors that facilitate a basis in propounding any new theory. On the contrary, the deductive approach is the one in which a researcher is dedicated to checking the authenticity of any situation, statement or theory. In a deductive approach, the researcher is restricted to a certain amount of limitations and conduct study in limited boundary (Muijis, 2010). Here total concentration has been paid to the inductive approach so that an effective incentive plan could be identified for the Suning organization. With the help of inductive research approach, it becomes easier to observe the suitable internal working environment with context to the incentive plan.

3.4 Research Type:

There are two types of research: one is the qualitative type and the other is the qualitative research type. Both these research types are highly significant in enhancing the value of the report. The nature of qualitative data means that there will be no usage of any kind of statistical and analytical tools. It is highly based upon the subjective and lengthy information. On the other hand, the quantitative nature of the study is related to the use of statistical data where the use of software and statistical tools is essential to measure the collected information and data (Neuman, 2009). In this research, the nature of the study is quantitative where the researcher has the objective information, and analytical tools have been applied in an appropriate way.

3.5 Sampling

The questionnaire survey is scheduled to collect data about the incentive system of Suning Company via email and paper questionnaire. A judgemental sampling has been applied to create a sample size of 500 respondents. 500 questionnaires and 300 valid data feedbacks should be finished within a week at Suning Group's customer service department. If there are no 300 valid data samples, more investigation will be done until the target is reached. In order to protect the privacy of respondents, no survey data can be released to anybody or the third party during the whole research process (Kothari, 2004).

3.5 Data Collection

The data has been collected from primary sources and for the same purpose the questionnaire technique has been put into practice.

Here, from the above literature review, we conclude six dimensions that affect employment satisfaction at Suning Group's, so the hypothetical model in this research is as follows:

Figure 1: Six Dimension Model

The questionnaire design is based on the above hypothetical model. There are 50 questions contained under the six dimensions. With regards to the part of empirical analysis, the first step is to perform a descriptive analysis on respondents before the statistical analysis, in order to later understand data distribution; then it is to check the reliability and validity of this questionnaire to guarantee its design scientificity and effectiveness; and finally, it is to conduct a regression analysis on the questionnaire to find out the factors affecting employee satisfaction (Kumar, 2010).

3.7 Data AnalysisIn order toanalyse the information Statistical Packages for Social Science (SPSS) and regression analysis that has been conducted within the study. Firstly, this research designs has employee satisfaction questionnaire which is highly targeted and of high validity and reliability. This is combined with the development status and system characteristics of Suning Group's customer service department, and then is analysed through Statistical Packages for Social Science (SPSS). SPSS is a statistical analysis software used to check the reliability and validity of the survey results, thus guaranteeing the effectiveness of the questionnaire survey theoretically.Secondly, regression analysis is performed to work out the key factors influencing the satisfaction degree of the employees of the customer services department in Suning.3.8 Reliability and Validity of the StudyIn order to ensure the reliability and validity of the study much concentration has been paid to the data collection and data sampling procedure. It is clear that here the sample size is adequate (as 500 employees have been sampled) so that the relevant information could be gathered. Further, it allowed the researcher to reach the desired conclusion. It is one of the most significant elements that have gained huge consideration within the study (Pennink and Jonker, 2010). Furthermore, in order to ensure the validity of the results, data is collected from the employees of the Suning Company.3.9 Limitations of the StudyThe major limitation during the study is to manage the long and lengthy data and majorly ensuring the proper collection of data. It is clear that the statistical tools are majorly difficult to apply, and it demands a careful approach to conduct the study. This limitation was overcome by using user friendly software SPSS that significantly ease the process of data storage and simulation. Another limitation that has been faced is related to approaching the people with respect to conduct the study. Since all the respondents are from the company, they have busy schedules, so before conducting the survey, prior permission was taken from all the respondents (Kothari, 2004).3.10 Ethical ConsiderationsIn order to ensure the authenticity and the genuineness of the report, there is a huge requirement to ethically align the study. The ethical issue that has gained huge consideration into the current report is related to the avoidance of plagiarising from any other research or online material. The sources from where information is gathered are properly cited, and most importantly the trusted online sources have been referred by the researcher so as to ensure reliable data collection and valid results. Ahead, there is no manipulation of the gathered information (Muijis, 2010), and the data has been presented in its original form. Finally, questionnaire was distributed through e-mail to all the respondents, thus, ensuring eco friendly way of data collection. Thus, these are major ethical aspects that have been followed in the current scenario.

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This is the penultimate, but core section of any research work as all the findings from the analysis of data and final results are presented in this section. This research work aims to find out the satisfaction level of the employees at customer service department of Suning Group regarding its incentive structure. In this regard, the researcher has applied quantitative data analysis techniques in order to pinpoint the solution and SPSS was employed as the quantitative technique. The researcher has tried to find out the factors that provide employees with maximum satisfaction in their incentive structure. For this purpose, the researcher has applied multiple regression analysis between the overall rating of the incentive system and several other variables that guide the satisfaction level of the employees. Regression analysis has been performed with the help of a statistical tool known as SPSS.

4.2: Quantitative Analysis

Descriptive Statistics

The below table shows descriptive statistics of all the factors included within the industry:

Table 2: Descriptive Statistics

Mean

Std. Deviation

N

Overall Ranking

6.64

.739

300

Job Content

6.47

1.276

300

Job Duties

4.04

1.429

300

Job Identification

4.05

1.379

300

Job Competency

4.07

1.438

300

Job Challenge

5.79

1.648

300

Workload

3.93

1.436

300

Personality Fit

4.46

1.751

300

Confidence In Work

4.27

1.734

300

Exert One's Advantages

4.54

1.756

300

Job Autonomy

4.43

1.650

300

Job Achievement

5.51

1.117

300

Praise and Commend

5.57

1.117

300

Wage Income

7.27

1.163

300

Wage Increase

7.73

1.023

300

Bonus

6.94

.998

300

Allowance

6.49

1.043

300

OT Wage

4.99

.805

300

Welfare

4.96

.863

300

Training

6.48

.993

300

Vacation

5.45

1.134

300

Colleagues Care and Support

4.00

.803

300

Superiors Care

4.05

.812

300

Interpersonal Relationship

4.01

.832

300

Leader-Member Relation

6.95

.889

300

Cultural Atmosphere

6.54

1.045

300

Colleagues Mutual Respect

4.00

.836

300

Learning Atmosphere

5.91

1.255

300

The above table 2 shows the mean standard deviation and number of entries for each of the factors. The higher the mean values implies that more rating points are given to the factor by employees and the lower the rating points means that fewer points are given. This indicates that those factors that have got higher means are more liked by the employees whereas those which have got lower means are less popular. However, here it is important to note that higher rating points do not necessarily signify a great degree of correlation and regression between the factor and the overall satisfaction level. From the above table 2, it can be seen that wage increase has got the highest mean and workload has got the lowest mean amongst all the factors. Finally, for all the factors, there are 300 entries.

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The above tables (3, 4, 5 and 6) show a cross correlation between all the variables with each other and with the satisfaction level of the employees. A positive correlation between the variables means that with the increase in one variable, there will be an increase in another variable and vice versa. On the other hand, negative correlation means with the increase in one variable, there will be a decrease in the other and vice versa. Wage income is significantly correlated with the satisfaction followed by the cultural atmosphere.

The 'enter and removed' table only shows those independent variables that are highly significant with the independent variable. In the given case, only 10 independent variables out of a total of 28 have been entered in this table. This means these independent variables have a high level of significance with the dependent variable. From the analysis, it has been found that wage income has highest significance with the satisfaction level followed by culture atmosphere, job content, wage increase, job challenge, bonus, praise and commend and interpersonal relationship.

The summary tables show the regression between the independent variables and the dependent variables. From the table it can be concluded that as we move down the table, the value of regression coefficient, that is, R2 keeps on increasing, this means that the addition of these variables one by one makes the model more significant. The Durbin Watson value in the last column of the table is also of a lot of importance. It indicates whether the variables in the model have significant correlation with the independent variable or not. As a rule of thumb, it is said that if the Durbin Watson value is between 1.5 and 2.5, then the degree of significance is poor and if it is above or below this range, there exist significant correlation. In this case, this value is coming out to be 2.523 which showa significant correlation between the variables. Thus, the above analysis shows that variables such as wage income, cultural atmosphere, job content, wage increase, job challenge, bonus, praise and commend and interpersonal relationship play a significant role in determining the satisfaction level of the employees and companies must pay attention to these variable while designing their incentive system.

4.3: Findings

Wage increase has got the highest mean and workload has got the lowest mean among all the factors.

Wage income is significantly correlated with the satisfaction followed by the cultural atmosphere.

Variables such as wage income, cultural atmosphere, job content, wage increase, job challenge, bonus, praise and commend and interpersonal relationship play a significant role in determining the satisfaction level of employees.

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The actual aim of every organization is to work for the stakeholders. Employees are significant stakeholders who must be dealt with in a proper and effective way. Their satisfaction and motivation must be the priority of the companies. In this regard, the incentive could be treated as that extra amount that company shares with its employees against their performance. Furthermore, the incentive system is one of the best ways to build a positive relationship with employees. Moreover, a positive and excellent incentive system can deliver appreciation to exceptional performance of employees. According to the Herzberg theory, the incentive system of the company should provide proper remuneration.

There are certain problems that could be faced by the companies when formulating an ideal and beneficial incentive plan. The assessment of the performance of employees is one of the major factors that could be treated as a challenge to the incentive system. The construction of an incentive system could face the challenge related to manipulation within the performance system as well. It could also give birth tocorruption and unethical activities if the managers are not fulfilling their responsibilities. Thus, the principles of an incentive system suggest that the role of each and every individual is immense in making the incentive system effective and efficient.

According to Heinrich and Marschke, incentives can generically be defined as something that motivates an individual to perform some specific set of actions, so that they can complete different functions and duties and contribute towards the attainment of some specific goals and targets. According to Johnson and Hoyo, human resources is one of the most important and vital assets that business organizations can obtain, due to that, it is necessary to give precedence to taking steps to satisfy them to the greatest extent possible. For this, incentives have a very crucial role to play. Pedroni and et. al, supports this by stating that companies must pay a good amount of money in terms of incentives to its employees, to motivate them and extract the best performance from them, while making them loyal and committed to the workplace. This essentially means that if an organization aims at sustaining its position in the market for extended time periods and also fulfill its corporate goals and objectives comfortably, then its incentive systems can turn out to be crucial.

Incentive programs motivate employees to push and challenge themselves to achieve a higher degree of productivity. Morale booster is another point that explains the importance of having an incentive system in place. Incentive plans have the capability of increasing morale of employees and enhance their level of job satisfaction in the workplace. Moreover, incentive systems are a very effective source of retaining employees at the workplace; they have a very significant impact on working capacity of the organization.

Interpretive research has been applied to the study, and it adopts the thought of empirical research to study the raised questions. Here the whole lot of concentration has been paid to the inductive approach so that the effective incentive plan could be identified for the Suning organization. As with the help of inductive research approach, it becomes easier to observe the suitable internal working environment with context to the incentive plan. The nature of the study is quantitative where the researcher has the objective information. Data has been collected from primary as well as secondary sources, in order to analysis the information SPSS and regression analysis has been conducted within the study.

From the analysis it has been concluded that Variables such as wage income, cultural atmosphere, job content, wage increase, job challenge, bonus, praise and commend and interpersonal relationship play a significant role in determining the satisfaction level of the employees. It means all the employees cannot be motivated throughmonetary benefits only, for an incentive system to be effective, it must include non monetary benefits as well. Thus, the results align with the Maslow's Need Hierarchy Theory, which states that all the individuals cannot be motivated from the same force: different people have different needs. Therefore, it is essential for Suning Company to design its incentive system in such a manner it has both monetary and non monetary components.

5.2: Recommendations

As per the aims of the company, Suning Group can choose from various incentive programs such as individual, group, and company incentive plan.

The incentive program of the company should have both monetary and non monetary benefits for motivating all kinds of employees.

The incentive should purely be based on performance and not on the position of the employee.

After conducting this study, I have learnt a great deal about the entire research process and its various stages. This work has boosted a lot of confidence in me and now I am capable enough to conduct any kind of research study on any subject. I have not only learned about the research process, but this study has also provided me an opportunity towiden my knowledge on an incentive system.

One of the greatest achievements from this work is that now I have gained tremendous knowledge regarding different sections of a research process. I have understood that it is very essential to have a coordination and integration between all the sections as all the chapters of the work are interrelated to each other and any discrepancy in any of the chapter may affect the quality of the entire dissertation. This work has made me understand that how one can coordinate all the sections for better understanding of the readers. Through this work, I also learned about constructing aim and objectives of the study. It's not an easy task to form aims and objectives of the work as it looks like. An individual has to have complete understanding of the topic before forming its aim, objectives and developing a hypothesis. If aims and objectives are not stated properly, it is impossible for any researcher to reach to some authentic conclusion.

Another important learning from this work understands the importance of research methodology. There are many techniques available to a researcher when conducting a study. However, it is essential for the researcher to select appropriate methodology in order to succesfully conduct the work. Now I am clear with each and every technique of various research methodologies and can select an appropriate technique for different work depending on its nature. This work has also provided me an opportunity to work on the statistical software SPSS and thus, I have now hands on experience of this tool.

Apart from this I have also learned a great deal about Incentive programs. Incentive programs are essential for companies, because of the reason that they have a significant influence over the aspect of service delivery to the organization. It is required as it enables the organization to create a positive working environment and the company could get a chance to share their wealth with the hard working employees.There are various ways through which incentive system could be provided. The company can fix particular amount after the particular level of sales, or the incentive could be provided in any other way as well. The ideal incentive system always justifies with the actual efforts made by employees for the growth and development of the organization. Thusoverall, working on this assignment was a great learning experience for me.

Bau, F. and Dowling, M., 2007. AN EMPIRICAL STUDY OF REWARD AND INCENTIVE SYSTEMS IN GERMAN ENTREPRENEURIAL FIRMS. [pdf]. Available through: < http://www.sbr-online.de/pdfarchive/einzelne_pdf/sbr_2007_april-160-175.pdf>. [Accessed on 26th July 2015].

Karsenty, A. and Ongolo, S., 2012. Can “fragile states” decide to reduce their deforestation? The inappropriate use of the theory of incentives with respect to the REDD mechanism. Forest policy and economics. 18(1). pp.38-45.

Park, H. W. and Leydesdorff, L., 2010. Longitudinal trends in networks of university–industry–government relations in South Korea: The role of programmatic incentives. Research Policy. 39(5). pp.640-649.

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